Free web tools and social media networks are a dime a dozen...but for a few extra dimes they will offer you some additional, exclusive features only available to pro users. While lip service is constantly being paid to the free and open model of web-based applications, the individuals behind those apps still have to make a living. Thus monetization is a constant topic of conversation among the programmers and project managers behind the free tools and platforms we have come to depend on. Monetization can take on many forms including ad revenue, subscription fees and private funding. For every type of service numerous companies compete in a Darwininian battle for survival of the innovative. Only the most attractive, user-friendly and feature-filled service will survive long enough to make a significant return on the time and money they have invested. Users are the key to the golden city of monitezation. You must gain a following before you can gain on that following.
The best way of monetizing is to determine your strategy before you launch. A great example of this comes from Wiggio, "a free, online toolkit that makes it easy to work in groups." They even post their monetization strategy in the FAQ section of their website:

"What does Wiggio cost?
Nothing. Wiggio is completely FREE. There are no add-ons or premium features.

How will you make money if you don't charge to use the site?
We plan on placing targeted advertisements on the side of the site, very similar to the look and feel of Facebook's ads. For instance, if you're in a group for your basketball team, you may see a promotion for new basketball shoes; if you're in a group for your economics class, you may see job postings for relevant positions."

Not only do they already have a plan for monetizing their service, but they are also keeping their users informed. The key to any monetiztion strategy is to let users know from the beginning how and when the service will change. A case of bait (free and open model) and switch (fee-based service) will only result in angry users who are more than happy to share their experience with their thousands of Facebook friends and Twitter followers.